Date: Sunday 08 Jan 2012
When publicity seekers like Lady Gaga say they want to be in a Bollywood film, you know that the Indian movie industry is now of global importance. There is plenty of opportunity for Bollywood film producer and distributor Eros International. The shares were first tipped in The Sunday Telegraph at the start of October – and the shares soared to 270p a couple of weeks later as the company hosted an analyst visit to India. They have eased back since then but are still 10% ahead of the tip price. The shares are trading on a March 2012 multiple of 6.7 times, falling to 6.1 in 2013. The company does not currently pay a dividend. Questor feels that now is a good time to buy shares in Eros.
For cheap and traditional airlines one of the biggest single costs is fuel, which accounts for about 40% of total spending. And today aircraft makers are under more pressure than ever to make their planes more fuel-efficient. So perhaps it is not surprising that Boeing’s new 787, or ‘Dreamliner’, is so popular. Launched with much fanfare in September, it uses between 25% and 40% less fuel than older, similar sized jets and airlines are eager to snap it up. This is good news not just for Boeing, but also for suppliers such as Senior, the British engineer that makes aeroplane parts. Senior makes ducting, flexible metal components and even engine widgets for Boeing and the Dreamliner is its biggest money-spinner. The group is supplying £560,000 worth of parts for each one made and expects to boost turnover by £100m from this plane alone over the next three to four years. However, Senior is not reliant on the Dreamliner. The group has grown steadily over the past five years and was barely dented by the financial crisis of 2008-09. Its future looks bright and, at 1771⁄4p, the shares offer solid long-term potential. Buy says the Financial Mail on Sunday´s Midas column.
India’s stock market performance in 2011 was among the worst of any major economy. But many analysts believe that prospects are brighter for 2012. They were given further cause for cheer last week when the Indian government announced that for the first time, foreign individuals would be able to invest directly on Mumbai’s stock exchange. Hong Kong-based Rajendra Nair of asset manager JPMorgan acknowledges the shorter-term problems facing the fund that he manages, the JPMorgan Indian Investment Trust. These include global financial woes such as the euro crisis, from which India is not immune. There are also local problems, such as uncertainty over government policies, which, he says, will not go away in a hurry. Longer term, however, Nair remains upbeat. ‘In a world starved of growth, India has to be attractive,’ he said. The fund underperformed during the 2009 rally, when it was too cautiously positioned. Nair’s team concentrates closely on sustainable businesses, buying only when prices are attractive, but this point might not yet quite have arrived. He added that: ‘After the sharp sell-off last year, valuations are more interesting,’ says The Financial Mail on Sunday.
Vodafone shares hit a peak of 191.3p in November 2007 before the credit crunch sent all asset classes tumbling. The shares hit their all-time high during the dotcom boom, rising to almost 390p in June 2000. Despite the fact the shares are close to multi-year highs, they are still yielding a prospective 7.5% in the year to March 2012, rising to 7.6% in 2013. What's more, this yield does not include the 4p-a-share special dividend that will be paid on February 3. However, new investors are not eligible, as the shares traded without the right to this in November last year. The special payment is a result of the resumption of dividends from its 45%-owned Verizon Wireless joint venture in the US. Goldman is very bullish on the shares. Analysts at the investment bank have set a target of 245p a share, forecasting a total return of 55% over the next two years, with 38% coming from a share-price appreciation and 17% from dividends. Vodafone shares are a core holding in any portfolio. Buy, says The Sunday Telegraph´s Questor team.
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